Chancellor’s plans to boost economy
Jul 09, 2020
Chancellor Rishi Sunak has outlined his plans to boost the UK’s economy following the coronavirus pandemic, announcing that he wants to “support, create and protect” jobs.
Speaking in the House of Commons on 8 July 2020, the Chancellor announced:
- A Job Retention bonus
Businesses with employees on furlough will be paid £1,000 for each worker they bring back from furlough and keep employed until January 2021. It will apply if the employee is paid a minimum of £520 per month from November to January. Employers will be able to claim the bonus from February 2021 once accurate payroll data to 31 January has been received. More information about this scheme will be available by 31 July and full guidance will be published in the Autumn.
- A kickstart scheme to create work for young people
A £2 billion fund is being made available to subsidise six-month work placements for people aged 16-24, who are on Universal Credit and at risk of long term unemployment. The Government will cover young people’s wages for up to 25 hours per week at the National Minimum Wage. It will also cover the associated Employer NICs and minimum automatic enrolment pension contributions. It’s estimated that this could translate into the support of more than 300,000 new jobs.
- A cut to VAT in the hospitality and tourism sector
There will be a temporary cut in VAT from 20% to 5% on food, non-alcoholic drinks, accommodation and attractions which will apply to restaurants, pubs, hotels, campsites, cinemas theme parks and zoos to help encourage spending and boost the economy. This will apply from 15 July until 12 January 2021.
- A grant for businesses offering apprenticeships
Businesses will be paid £2,000 as an incentive to hire young apprentices aged 16-24. There will also be a £1,500 bonus for businesses which hire apprentices aged 25 and over. This funding is in addition to schemes already in place to support employers in taking on apprentices.
- A cut to stamp duty
The Nil Rate Band of Residential SDLT (Stamp Duty) will be temporarily increased from £125,000 to £500,000 until 31 March 2021. According to the Chancellor this means that the average stamp duty bill will fall by £4,500, and that nearly nine out of ten people buying a main home this year will pay no stamp duty at all.
- An ‘Eat Out to Help Out’ discount
This will apply to everyone in the UK, and will offer a 50% discount up to £10 a head off food and soft drinks, if you go for a meal out between a Monday and Wednesday in August. Businesses taking part in this incentive for the economy will have to register through a website which opens on Monday 13 July, and they can then claim the money back each week in August. The funds will appear in their bank account within five working days.
We will keep you up to date with these and other measures as the Government releases further details. If you have any queries about these updates and how they may affect you or your business, please talk to us and we’ll be happy to help.